The Importance of Sustainability in Supply Chain Management

One of the first things you’ll discover when you run a warehouse operation is the importance of sustainability in your supply chain. Sustainability involves more, however, than simply using solar energy or other renewable resources.

In this guide, learn about building and implementing a sustainable supply chain management system and why it’s important to your warehouse’s success.

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What is Sustainable Supply Chain Management?

Sustainable supply chain management starts with being aware of your company’s environmental, social and economic impact and, most importantly, making the necessary changes to lessen it. The process can involve everything from a warehouse’s source of power to the transportation of goods and beyond.

If your warehouse manufactures products, your sustainability strategy will also involve reviewing the entire manufacturing process, which includes the sustainability practices of all vendors providing raw materials, the assembly of products in the plant, and disposal and recycling of waste.

Why is it Important to Have a Sustainable Supply Chain Management System?

The importance of sustainability in a supply chain extends beyond going green. A supply chain built on a sustainable platform creates more partnership opportunities because environmental responsibility is a crucial focal point in today’s industry. Practicing eco-awareness in every aspect of your business improves your reputation and further legitimizes your organization.

A sustainable supply chain also helps improve productivity while saving money at the same time. By using sustainable techniques and resources, you increase the efficiency of buildings, vehicles and machinery at a significant cost savings. Nike is a prime example of sustainability at work. The world’s number one shoe manufacturer changed how it makes some of its shoes and reduced labor costs by up to 50 percent and material use by 20 percent. The result was a 0.25 percent increase in margins.

Implementing a Sustainable Supply Chain

Creating and implementing your own sustainable supply chain management system isn’t difficult. Here are four steps to implement a sustainable supply chain.

  1. Identify your sustainability goals and objectives, and then create a plan for how to achieve them. Be sure to include your supply chain because it plays a big role in your company’s environmental, social and economic impact.
  2. Create a sustainability policy for your suppliers and customers. What you prescribe is up to you, but it should have requirements for waste disposal, energy use, transportation and more. Once you make a policy, stick to it.
  3. Evaluate your supply chain from top to bottom. Is it as sustainable as you want it to be, or should you make adjustments?
  4. Take the appropriate action to make your supply chain more sustainable. This may mean changing vendors or transportation options, or it could result in your current partners adopting more sustainable practices in order to maintain your business.

Learn More

These days, sustainability is more important than ever. Make an impact by adopting and implementing a sustainable supply chain management system. It’s important that sustainability be considered in every business decision you make going forward.

Learn about the industrial sustainability initiative at Prologis, which focuses on an environmental, social and governance (ESG) strategy.